Retirement Planning Company – Highwood, Illinois
For those in "Generation X" - defined as people born between the mid-1960s and the early 1980s - retirement planning sounds like something your mother and father or other "old people" would do. But you know what? With many "baby boomers" either already in the middle of retirement or observing it in the near future, "Generation X" stands out as the next generation of people to reach old age. Sure, it's still a ways off, but those in their 30s and 40s ought to begin centering their investment planning on retirement and making sure they've got the type of retirement they are working hard to enjoy. Here are some tips on preparing for retirement:
Retirement life in the future will be different than the retirement of today. It will be much better in some ways, and worse somewhat. However, the retirement planning for today's workforce needs to be far different than it was in the past.
On the bright side, people are living longer than ever. As of not too long ago, the average life span of an American was 77.9 years, exactly 2.5 years over the average life span in 1990 and more than 4 years more than the average life span in 1980. Therefore investment planning for retirement has to account for a longer period of time now than a generation or two in the past.
Social Security and Retiring - Highwood, Illinois
On the down side, Social Security is going to be a far less dependable income source than it is now. And also the likelihood is slim-and getting slimmer each year-that retirees 20 and 30 years from now will be able to rely on a work pension and enjoy lifetime benefits from their former employer. Increasingly more, retirees will have to depend on their savings to pay for the expenses of living and medical health insurance.
With people living for a longer time and needing extra money to do so, retirement planning is a vital activity even for those who are halfway to the regular retirement age of 65. It may be a daunting task to plan for a few decades into the future, particularly with bills, rents and mortgages to pay today, but procrastinating will not make it any less complicated.
Putting even just a small amount of money now into a savings account which serves as a retirement savings plan can pay off later on. The interest you receive on money in a savings account will allow your initial investments to grow to something sustainable. A savings account will provide a place where you can accumulate capital earning a little interest rate until there is enough to invest in a reliable security that will yield you more like a municipal bond.
Another good approach that can surely and gradually build a nest egg is to put money into long-term bonds. Upon maturation of the bond, you'll get back your initial investment and also all the interest which collected over the life of the bond. This is a considerable amount of money for a 20- or 30-year bond-money that can provide a good foundation for retirement. And a municipal or government bond is really as safe an investment that you can ever make.
401K and IRA - Highwood, Illinois
However, the best approach when it comes to retirement planning is to put funds in a 401K plan at work or in an IRA opened with an investment house. For the people for whom a 401K is not a retirement planning choice, an IRA is the next best thing. Money placed in this account is tax deferred and might be tax-deductible, depending on how much is invested every year.
For more details, please feel free to contact GC Financial Advisors Ltd. at any time and we'll be glad to help you! We offer 401K and IRA rollover and review services for folks in the Highwood, Illinois area.
